City council live blog 5/15/12: Councilors United

Tuesday

May 15, 2012 at 7:59 PM

Posted by Jeremy Shulkin

Today's agenda:&nbsp;Konnie Lukes goes after the commercial revaluations and the police garage expenditures, the City shows off it's favorable bond rating and the council takes up some of the Sunshine Week proposals from March (including one from this guy).

Mostly though, people will show up to watch the councilors talk about Citizens United, as ten of them have signed on to a resolution in support of Congressman Jim McGovern's proposed constitutional amendment that would reverse the Supreme Court's FEC v. Citizens United ruling.

At 5:00 the city council and City Manager Michael O'Brien will hold their first of three public discussions on the FY&nbsp;2013 budget, focusing on the city's legislative offices, city manager's office, DPW, HR and economic development offices.

Agenda.

7:39:&nbsp;The council remembers Kevin Lyons.&nbsp;

7:46:&nbsp;Beginning with the resolution for Congressman McGovern's constitutional amendment to overturn the FEC v. Citizens United supreme court ruling. Lukes wants to amend it to include labor unions, which she clarifies would be impacted in McGovern's amendment language. &quot;If we could include the wording of the joint resolution&nbsp;that was presented for congress and some public resolution...is intended to include all groups of people that are organized that can donate large sums of money&nbsp;to candidates I&nbsp;certainly have no objections [to the resolution].&quot;

She says elections have become more about influence and name calling. She at first thought it wasn't in the jurisdiction of the council, but she says it does impact all people running for office at any level.

Petty affirms that includes &quot;everyone.&quot; It's amendended to include her concerns, and it passes unanimously. Applause from the gallery.

7:50:&nbsp;A&nbsp;resolution to support Rep. Jim O'Day's An Act to Invest in Our Communities also passes, with Economou, Lukes, Russell and Toomey all voting no. No public comment for either vote.

7:57:&nbsp;Lukes begins her flurry of items on the commercial assessment process, and she notes the City has provided a&nbsp;supplemental item explaining more about the past manual overrides they say led to higher assessments now. (I&nbsp;haven't had the chance to read through it yet.)

Lukes says there are still a number of hoops to jump through until the final numbers. &quot;This issue is going to be haunting us for years. We're going to have abatements which will probably take us into litigation.&quot;

&quot;Somebody's always going to be hurt when we have this kind of process that has so many questions.&quot;

Petty takes the floor to talk about the CM's supplemental item. &quot;I&nbsp;know there's been some question of the integrity over the system...the current system in place is a good system.&quot;

&quot;The biggest issue I'm hearing from the business community has to do with the vacancy factor and revenue,&quot;&nbsp;Petty says about the income method used to generate valuations of the property.

Assessor William Ford says parking lots used to be classified as &quot;vacant land&quot;&nbsp;or some version of that. &quot;It was previously listed as undeveloped land...it is developed land, it's a parking lot.&quot;

&quot;It can't be an undeveloped lot if it has a parking lot on it.&quot;

Vacancy factors. &quot;Our vacancy rates that we calculated range from 3% to 23.5%....We don't use exact properties from the year.&quot;

&quot;So we use the market information to develop those vacancy rates...We do not apply an individual's property rate...It is what an investor anticipates that vacancy to be if they bought the building.&quot;

CM&nbsp;O'Brien:&nbsp;&quot;This is the most credible database we've had in the assessing department in my view, in history,&quot;&nbsp;he says about the system. &quot;We've done the due dilligence to have this system in place going forward.&quot;

Russell: He says it's no secret&nbsp;he's been concerned about this process. &quot;I knew that when we were using strict approaches...we would be coming up with numbers that were quite a&nbsp;bit higher.&quot; He says he didn't expect an income approach to be applied on buildings without income. He asks Ford why we're assessing vacant properties as not vacant.

Ford responds that there were too few vacant land sales to compare them. Then he gets into assessment process details. It's a battle between two real estate professionals. &quot;If it's pure vacant land no income process is done,&quot; Ford says.

Russell asks the administration a question he says he gets asked. &quot;Is there any potential or do you believe there was anything illegal going on in our assessing department in years past?&quot;

CM:&nbsp;&quot;There's absolutely no evidence whatsoever that's been brought to my attention...to support those allegations.&quot;&nbsp;He credits the previous assessor, Bob Allard, for his professionalism and integrity. &quot;It's important to stick to the facts. The entire time DOR has been involved in the effort&quot; for data reviews.&nbsp;

Russell says even though he disagrees with the process, he's never questioned the integrity of the assessor's office. &quot;What we have is an honest disagreement to the values.&quot;

Economou, another realtor, jumps in. &quot;Everything that I've been taught in 14 years of real estate the numbers and the model that I've been taught&quot; doesn't fit.

Economou asks about square foot value for office buildings, which Ford says average about $18. Economou says that's too high. &quot;I&nbsp;really have a huge difficulty understanding that and buying that as reality.&quot;

Ford says reviews &quot;actually support&nbsp;the values we've put on the properties.&quot; But people can still file abatements.

Economou says he worries about businesses like Saint-Gobain, who could pick up and leave Worcester with another &quot;Wyman-Gordon site&quot; which would take millions of dollars in funds and man hours to rehab for reuse.

&quot;I don't agree with it, I think the system is flawed, I think we're going to be in a lot of trouble going forward.&quot;

Lukes reiterates that Worcester's been certified in previous revaluations. She says there's &quot;a certain amount of wiggle room in appraisals.&quot;&nbsp;

&quot;It's easy for people to applaud in the audience because who else are they going to blame except us...I don't know if we deserve it this time...There's nothing specific to grab on to...If there was a regulatory scheme in effect and guidelines to follow and we were not penalized, where do we go from here and how do you explain&nbsp;it,&quot; she asks rhetorically.

Toomey asks if any other municipality in the&nbsp;Commonwealth had these issues. Ford says Boston a few years ago, but not the extent, same answer about Cambridge. Toomey wants an update on those communities.

&quot;I hope that you'll help me understand this:&nbsp;how do you go over a 100% increase?&quot;

Ford says the typical variation is 25-30%. Saint-Gobain, for example, he says were valued at $.50 per square foot while another former property of theirs recently sold for $60 per square foot. Comparable value means their assessment would go way up.

She wants to know how it impacts PILOT&nbsp;payments. Ford says if the PILOT is tied to values, then it would, but many PILOT agreements are based on purchase price. It could impact TIFs too.

&quot;This assessor and past assessor work very hard to be fair and equitable...I&nbsp;just hope we get the information that we need to make the decisions we have to make.&quot;

J. O'Brien: Says there's been some &quot;balancing out&quot;&nbsp;of valuations in the residential neighborhood around his house. &quot;All those properties were assessed not just by our team but they were also independently assessed.&quot; Ford says all 48K&nbsp;properties in the city were reviewed by multiple agencies, including the city and an outside firm.

Rushton says the commercial assessment controversy came &quot;rolling In Like a Thunder Storm Into Oklahoma.&quot; He says it was laid out very directly that there was &quot;no malfeasance going on&quot; in previous administrations. He credits Germain for his work on the Municipal Operations subcommittee that made this transparent. &quot;There were public meetings, unlike any other triennial review.&quot;

He reiterates that assessments should be what the parcel is worth, not what it could be worth later on. (He actually said it better than that, but I lost the quote.)

Ford says if a property has been vacant for 10 years, then they apply a physical deterioration calculation.

Rushton says he encouraged there will be another Municipal Operations meeting so more business owner questions can be addressed. &quot;Let's hope that DOR does certify because this is going to be detrimental to our budget.&quot;&nbsp; &nbsp;

8:52:&nbsp;Rivera's concerned about small and mid-size businesses.&nbsp;

CM says tax rates and assessments are just one factor as to why businesses succeed in an economy and location. &quot;I'm not at this juncture that we're going to somehow fall off our game.&quot;&nbsp;

Eddy says he finds himself uncomfortable in these situations because commercial assessments aren't exactly first nature to him. But, he says a result has come that's not desirable. &quot;It's bad enough we've been saddled with mistakes of past councils with this lousy dual rate...but this just made our job tougher in terms of economic development.&quot;

&quot;I think there's mistakes made here on business side...I don't think it's fair, I just don't...It doesn't reflect reality...We are absolutely going to have to massage and work with our big businesses.&quot; For small businesses, &quot;we'd better have our friendly faces on&quot; when they come for abatements or questions. &quot;This is just not helpful to our abilities and desire to be a business friendly city here.&quot;

Palmieri says businesses are wondering &quot;why now, and why is it happening to them?&quot; He points out that nearly 30% of properties in Worcester don't pay taxes because of nonprofit status.

&quot;If you think you're hearing lots of discussion now, strap on your seat belts...I'm hoping we'll have some common sense that will prevail&quot;&nbsp;to offer some assistance.

Germain says &quot;none of us really have a handle on this whole process and how we got from point a to point b.&quot;

He says the CM's (supplemental) report gave him a better understanding but it's not getting out to everybody. &quot;It's not being mailed to every commercial property owner in the city.&quot;&nbsp;He says it's time for his subcommittee to hold more meetings about it so the public can come in and ask questions.

J.O'Brien wants a recommendation on the tax rate from the City admin for a &quot;fair and equitable&nbsp;place&quot;&nbsp;to start is on the tax rate and go from there.

9:13:&nbsp;Lukes wants a breakdown of WPD garage funds in the FY13 budget, where Chief Gemme's brother&nbsp;works. Eddy opposes it because it singles out &quot;one section of the police department.&quot;&nbsp;And he says it's not done for other city departments.

CM&nbsp;O'Brien says &quot;there's no conflict of interest&quot; in reference to the garage budget because Deputy Chief Fleming filed the report, rather than the chief. Eddy says &quot;we don't ask it of any other division...We don't ask Chief Dio to do it in the fire department.&quot;

Lukes wants to know about pending legal cases and judgments filed against the city. She holds a transfer of funds to the legal department until there's an executive session next week to talk about it.

9:20:&nbsp;J. O'Brien wants the economic development subcommittee to hold a public hearing about the &quot;City Manager's decision not to enforce the Responsible Employer Ordinance.&quot; Lukes says there was a legal decision as the basis to the CM's decision. Rushton says at the time there was going to be &quot;further dialogue&quot; around this. He says it's not illegal to talk about it, no matter what the legal report says.

9:24:&nbsp;J.O'Brien reiterates his &quot;simple request&quot;&nbsp;for a report on cab&nbsp;licenses and livery licenses. He's promised he'll get it next week, an answer he accepts in the name of &quot;good relations.&quot;